Want to Grow Your Business? You Need a Growth Strategy
So you’ve started a business and completed projects with a number of recognizable clients. You’ve successfully put your business on the map. What should your next step toward attaining your goals be?
Business Growth Strategy
Growing your business is the next logical step when your initial products, services, and initiatives have already led to some profit. But with business growth comes exponential complexity.
Legal challenges, hiring the wrong team members, and failed pivots are among the leading reasons once-promising startups can sometimes fail.
Most of these issues are avoidable. However, they’re less avoidable when you’re scaling rapidly and making quick decisions based on day-to-day needs rather than long-term goals.
Before attempting to expand your business, you need to take the time to plan and fully document your growth strategy. With a well-thought-out strategy in place, you can ensure your business growth is led by informed decisions, not knee jerk reactions, and find ways to constantly improve your profitability.
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The Risks and Rewards of Business Growth
There are many excellent reasons to pursue business growth. With business expansion comes increased revenue, wider brand recognition, and an increased profile in your industry.
Brands that are household names spend fewer resources on customer acquisition and retention. Rather than focusing their revenue and efforts on marketing, they can use those funds for product innovation and service expansion.
Well-known brands also have an easier time attracting top talent, big-name clients and investors. These things are necessary for growth, but with every new employee, client and stakeholder, you assume greater risk.
Business growth can lead to revenue loss if assumptions are made, competition is not thoroughly vetted, or pivots in products and services aren’t driven by a significant amount of market research.
In fact, 42% of failed startup businesses cited a lack of market need as the primary reason for their failure.
By documenting your expansion strategy, you can identify potential risks and avoid them as you go along. A business growth plan allows you to anticipate when you’ll need to add new team members and leaders and take your time finding the right people to bring on board.
It also embeds time for market research into your growth plan, ensuring your decisions are based on data rather than assumptions.
With a documented business strategy, you’ll be in a better position to avoid the risks of business growth and, instead, amplify the rewards.
What is a Business Strategy?
In the simplest sense, a business strategy is a document that details your business goals and defines your strategies for meeting those goals. It’s a road map detailing the goals you’re striving to meet, how you’re going to meet them, and when you’re planning to execute.
Goals can and should be both short-term and long-term, looking as far as five years into the future.
The most effective business growth and development strategies are documented so they can be shared across the organization. Documenting strategies creates cohesiveness, allowing decisions and initiatives across the company to be catered to established goals.
While initial planning is crucial, iterative planning is important as well. By revisiting your business development strategy at regular intervals, you can make adjustments based on new information, market changes and historical data.
For example, if an initiative fails during the testing phase, all goals and strategies for that initiative should be replaced in the strategy document to avoid repeated situations in the future.
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How to write a Business Growth Plan
There are a few examples of business growth strategies you can learn from to document your own business plan. You could document at a high level, for example, or in great detail.
Or you could use an Agile approach to business planning short-term goals considered in detail, and future goals presented at a high level.
None of these approaches are wrong. Even high-level business strategy documents create a framework for decision-making and reducing risk. However, taking an Agile approach to documenting strategies for growth is a good place to start.
This significantly reduces the risk of near-term initiatives by presenting goals and strategies in detail, and it enables faster finalization of your business strategy by eliminating the need to provide minute details for future goals.
First, decide on what approach you want to take. Then, follow the steps below to develop your business plan.
Step 1: Define short- and long-term goals
The first step in writing a business strategy document is to simply document the goals you hope to achieve in the next five years. Goals can be both small and large, and can be either specific (increase revenue by 20%) or general (increase brand awareness).
Here are some examples:
- Increase product offerings
- Grow organic site traffic by 35%
- Open a second store
- Expand into new markets
- Launch an affiliate program
- Increase sales by 15%
A brainstorming session with all of your team leaders can be helpful in the goal-defining phase. At this stage, all goals should be considered and documented. In later stages, you’ll make decisions on which goals are worth pursuing.
Step 2: Prioritize goals
You always have time for the things you put first. After your brainstorming session, you should have a long list of potential goals to target, but not all will be viable. Additionally, some goals may be compounding, meaning you must complete one before you can target another.
For this reason, you’ll need to prioritize your goals. Goals at the top of your list should be those that meet one or more of the following criteria:
- They’re the most crucial to your business’ development
- They offer the highest return on investment
- They’re achievable using existing resources
It helps to use a relative prioritization: If you have ten goals documented, each should receive a priority of 1–10.
Prioritizing relatively doesn’t mean you can’t work toward multiple goals concurrently, but it does help with decision making when you lack the resources or funds to execute on multiple goals.
Step 3: Define strategies for meeting goals
Now that you’ve prioritized goals, you need to investigate strategies for meeting those goals. To form strategies, you need to think through the steps that will be required to meet them.
The strategies may require operational shifts, marketing initiatives, and acquisitions, among others. Some examples of goals and strategies are:
Goal: Open a second store within three months
- Conduct research to determine the ideal location for a new storefront
- Ensure existing revenue can support the operational costs, initial inventory costs, and personnel costs of a new store
- Hire a general manager, assistant managers, and store personnel
- Launch a marketing campaign to advertise the grand opening of the new location, driving initial sales and visits
Goal: Expand into three new markets
- Conduct market research to determine ideal markets for business expansion
- Review laws and regulations pertaining to conducting business in new markets
- Secure needed licenses and approvals for conducting business
- Hire staff to manage operations and sales
- Launch a marketing campaign to grow brand awareness in new markets
As you work through this process, you might find that some goals are more complex than you originally anticipated and that they’re unachievable with existing resources. If so, deprioritize those goals or remove them altogether.
Throughout the entire process, you’ll be working toward developing an achievable growth strategy. Doing so will require eliminating initiatives with a high risk of failure.
Read Also: The Habits of Successful Business Owners
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Step 4: Evaluate the competitive landscape or market demand
Once you’ve defined your business goals and strategies, it’s time to validate your assumptions. Opening a new store or launching a new product may sound like an exciting way to grow revenue, but it can fail rapidly (and expensively) if the market is highly competitive or if there’s little demand for your offering.
First, you need to conduct thorough research on your competitors. Answering the following questions can help guide you through this process:
- Who are your competitors?
- What products/services do they offer?
- What are their pricing models?
- How do they market their offerings?
- Where does their marketing fall short?
- What are customers saying about them?
By investigating the answers to these questions, you can determine the best ways to differentiate your offering from those of your competitors.
If you can offer the same products and services at a lower price and remain profitable, that’s your selling point. If you discover that customers are generally dissatisfied with a competitor’s customer service, you can capitalize on the opportunity and offer a much better service.
Conversely, if you find that your competitors have lower prices than you can offer, have extremely loyal customers, or offer higher quality products, you may need to revise or abandon your original goal.
In some cases, particularly if you’re offering an innovative product or service, you may not have competitors initially.
In these instances, it’s crucial to investigate market demand. You can conduct market research yourself or hire a market researcher to do it for you.
As you conduct competitor and market research, you should also revise and refine your business development strategy based on new information and remove any goals rendered risky after further investigation.
Step 5: Define timelines
Once you’ve defined your strategies and have validated your assumptions through detailed research, you’re ready to set timelines for enacting your growth strategy. Timelines can be set by goal priority or in sequence.
For example, your highest priority goal may be to open a second store. But meeting that goal requires that you first increase sales at your existing store by 15% to cover the operational, staffing, and inventory costs of your second store.
Even if increasing sales at your existing store is a lower priority, it needs to be executed first in order to achieve your highest priority goal of opening a second store.
For near-term goals, you may want to detail strategy timelines by month or quarter. For future goals, you might only specify the year you’ll begin executing on the goal.
Step 6: Formalize your business strategy
If your business strategy is only being used internally, the format isn’t important.
However, if you intend to use your business strategy to secure backing or investments, you may need to formalize the plan using a standard strategic plan template. This will require additional information, such as an executive summary and elevator pitch.
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Common Business Growth Strategies
In his book The Breakthrough Company, Keith McFarland recommends that small businesses and startups considering growth should proceed in a way that brings “the most results from the least amount of risk and effort.”
This is another important aspect of prioritizing goals. Prioritization based on what goals you want or can meet is not necessarily sufficient. You must also prioritize based on level of effort and risk.
There are several strategies you can employ for growing your company, and some will represent more risk than others.
For example, increasing the number of your customers in an existing market is likely less risky than moving into a new market. Both have risk factors, but market expansion is more likely to represent an increased risk because of the element of the unknown.
However, that’s not true 100% of the time. High-risk goals for one business may be low-risk for another. Risk is something each business must determine for itself.
There are several common growth strategies to consider when seeking to expand your business.
Increase sales or take on additional clients
One common growth strategy is increasing sales by acquiring new customers, taking on new clients, or selling additional products and services to existing clients. In fact, there’s an entire marketing approach dedicated to increasing sales with existing clients/customers: account-based marketing.
Develop creative marketing campaigns
Dollar Shave Club is an excellent example of growing a company using clever marketing strategies and a unique value proposition. The company created cheeky marketing videos that told stories of how expensive razors are and how difficult it is to purchase them.
The videos went viral, and the company went from a small operation in the founder’s apartment to a rival for big brands like Gillette and Schick.
Expand into additional markets
Market growth could take many forms: you could open a store in a new location, expand your digital marketing efforts to new channels, or start selling products from your brick-and mortar store online.
Selling through your own website or at a third-party site like Amazon or eBay can effectively grow your market reach to national and international customers.
Develop new products
If you run a successful business selling women’s clothing, you may want to expand your product offerings to include jewelry or shoes. You may also want to expand your customer base by selling men’s clothing or children’s clothing.
Expand your services
If you specialize in search engine optimization (SEO), consider offering related services to attract new clients or upsell existing ones. It’s not a huge leap to offer content marketing, search engine marketing, or social media marketing services alongside SEO.
You may also use your knowledge of SEO to develop tools or software you can sell that enable companies to optimize their own sites for search.
Expand through acquisitions
When major banks or health insurance providers want to expand into additional markets, they often do so by acquiring strong businesses that are already operating in target markets.
The downside of acquisitions is steep upfront costs, but the advantage is that the company will have existing employees, customers, and workflows and may be profitable from day one.
Eliminate the middleman
If you sell a product, one effective way to increase revenue is to manufacture products yourself. This can be achieved by setting up your own manufacturing facility, or by purchasing the manufacturing facility you’re already utilizing.
Manufacturing your own products can increase revenue by lowering your cost-per-unit, leading to higher profit margins or allowing for retail price reductions that boost sales.
Each growth strategy and its related risk and effort should be carefully considered as part of your overall business strategy before implementation.
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Use time tracking to successfully execute your strategies
After creating your strategies for growth and making the final tweaks, it’s time to execute them. Using a time tracking app like Hubstaff will help in making sure that you can follow schedules closely, and avoid missing deadlines and setbacks.
Hubstaff’s time tracking lets you see how much time you’re spending on each task. You can easily see if you’re right on track, or if you’re about to exceed your budgeted hours. Regardless of the scenario, you can make adjustments in advance and mitigate possible risks as you go along.
Using resources wisely is an essential factor in business growth strategies. Hubstaff has a project budgeting feature that lets you set limits for both your hours and finances.
The app will automatically notify you if you’re nearing these limits, so you can focus on your work without worrying about spending resources in excess.
With Hubstaff, you don’t need to allocate time on monitoring your resources and your productivity. What’s more, Hubstaff has other powerful features like client invoicing and automated payroll that will be extremely helpful as your business grows further.
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Adapting strategies to different industries
Depending on the industry your business is operating in, some strategies will be more effective than others. For example, a construction company growth strategy would be focused more on edging out its local competitors, whether through pricing flexibility or sheer output quality.
A SaaS company, on the other hand, can reach out to businesses from outside the country because their products and services don’t need to be physically present to be effective.
Similarly, retail business growth strategies will have different factors in the equation, such as shipping and production costs. A retail business will need to be successful and recognized enough in one location before it can begin to expand.
In other words, there’s no one strategy for all types of businesses. The key is to know your business and have a clear understanding of where you want it to be after a specific amount of time.
For small businesses, the road is more uphill compared to established organizations. This is why their focus should be on growing at a steady pace while wisely spending their resources. At the same time, they should also have a plan for scaling their business in the future, whether or not things go according to schedule.
Examples of successful business growth
A good example of successful growth is Away, a luggage manufacturer and retailer. Away was founded by Jennifer Rubio, a marketing professional, and Stephanie Korey, who worked in supply chain and merchandising.
Away is distinguished by its marketing strategy, which places a strong emphasis on user engagement and focuses on content that treats travel as part of a larger lifestyle. Founded in 2015, Away was able to reach sales of $12 million in just its first year. It also received awards from popular publications like Fast Company and Adweek, and continues to grow at a strong and steady rate.
Another great example is Dollar Shave Club. The company was founded by Mark Levine and Michael Dubin, who were frustrated and motivated by the unreasonable costs of razor blades.
Using their own money, they founded the company, launched a website, and slowly worked on growing their brand with support from capitalists.
Dollar Shave Club eventually grew enough to take on big brands and became a billion-dollar brand in under a decade since it was founded.
Read Also: The Importance of Business Continuity Plan to Know
Why you need a growth strategy
Starting and growing a business requires a significant amount of time, effort and planning.
Quick decisions and big investments may be appealing, but unless they translate into functional and sustainable business models, the temporary excitement can lead to very public disappointment.
Before you take steps to grow your business, you need to document your growth strategy. The research and documentation will take time, but the upfront investment will pay off in the end.
What strategies have you used to grow your business? Were they successful? Let us hear your story in the comments below!
